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19 May 2005

Madame Speaker
Honourable Members of Parliament
Ladies and Gentlemen

The freedom we attained on 27 April 1994 will mean nothing as long as it does not translate into a better life to the majority of South Africans. It was in recognition of this realism that the founders of that perennial document, the Freedom Charter, 50 years ago envisaged not only a South Africa that belongs to all who live in it, but also a society where the mineral wealth beneath the soil shall be shared by all. This was indeed a reaffirmation of the universally accepted notion that natural resources are the heritage of all the people of South Africa.

The advent of democracy in our beloved country in 1994 and the concomitant legal banishment of apartheid from our society laid a firm foundation for the ideals of the Freedom Charter to thrive and flourish. Since the government policy programme has been directed towards the actualisation of the Freedom Charter. My Department, as a custodian of government policy for the regulation of the mineral and energy resources, has been engaged in activities aimed at translating the dream of freedom into reality through the utilisation of these resources. I am honoured to join the Minister in reporting back to the people of South Africa on our progress in this regard.

Integrated National Electrification Programme

A lot of progress has been made towards universal access to electricity. The Integrated National Electrification Programme has delivered 232 287 household connections at R582 million, 2233 schools at R100 million and 50 clinics at R118 million. The programme is focussing on the creation of bulk infrastructure especially in areas where it has become impossible to connect new households to the network without reinforcement. The erection of bulk infrastructure has enabled local development in the nodal zones like OR Tambo district and Maluti a Phofung in the Free State. I am happy to announce that backlogs have been completely eliminated in the Kgalagadi Node and Western Cape schools.

New jobs and small, medium and micro enterprise (SMME) opportunities in KwaZulu Natal, Eastern Cape and Limpopo have been created as a result of the non-grid electrification of schools program. The maintenance of the schools will result in permanent jobs defined in terms of the non-grid learnerships that have been started. About 1 100 schools have been completed under the non-grid electrification program to fast track school universal access. This represents more than 50% of the total number of schools electrified in the past five years and this was achieved in one year. School electrification is done parallel with installation of e-leaning facilities i.e. satellite dish and educational content and computer installation, to ensure that our children become computer literate sooner than later.

Three co-operatives with over 10 permanent employees each have been started in the Eastern Cape to maintain 8000 solar home systems installed under the previous electrification program.

Forty thousand households in the Eastern Cape, Limpopo and KwaZulu-Natal were electrified using the same technology to provide lighting using the facility for electronic communication.

HYDROCARBONS AND RENEWABLES

Liquid Fuels Industry

The liquid fuels industry will, for the first time, be licensed this year. The objectives of the licensing framework as detailed in the Petroleum Products Amendment Act, 2003, include promotion of an efficient manufacturing, wholesaling and retailing petroleum industry; facilitation of an environment conducive to efficient and commercially justifiable investment; promotion of advancement of historically disadvantaged South Africans; and the creation of employment opportunities and the development of small businesses in the petroleum sector.

Gas Trade agreement – Mozambique

The private sector and the Mozambique government have expressed an interest in building a petroleum pipeline from Maputo to Witbank. The Gas Trade Commission will facilitate this initiative until a Petroleum Products Trade Commission has been put in place.

LNG project – Coega

A feasibility study by Eskom, Shell and iGas on the possibility of a gas-fired power station at Coega is underway. Gas for the project, if it goes ahead, will be supplied by Shell in the form of Liquefied Natural Gas (LNG) thus creating significant employment opportunities during the construction of a regasification terminal. An engineering study is in progress and the agreement between participating members is to be finalised shortly.

Integrated Energy Centres (IeC)

In December 2005, I launched an IeC in Matatiele in KwaZulu-Natal. We plan to launch an IeC in the following local municipalities between now and March 2006: Moshaweng (Northern Cape) , Ratlou (North West), Mutale (Limpopo), Greater Tubatse (Limpopo), Newcastle (KwaZulu-Natal) and King Sabata Dalidyebo (Qunu, Eastern Cape). I wish to commend Sasol and Total for their continued commitment to the rollout of IeCs.

The IeCs are a beacon of hope to communities that government is beginning to deliver on its promise of giving them a wider variety of energy choices.

Women in Energy in South Africa (Woesa)

My Department, together with its associated institution and industry, continue to support the women organisations in energy.

CEF’s Energy Development Corporation has taken a 49% stake in a R72 million hydroelectric plant near Bethlehem in the Free State. A shareholders agreement was signed with HydroSA, an affiliate of Woesa.

Women in Nuclear South Africa

The Department of Minerals and Energy hosted the Annual General Meeting of Women in Nuclear South Africa (WINSA), which continues to enjoy increased membership and support. An outreach programme to institutions of higher learning is planned.

Renewable Energy

A renewable energy strategy to detail implementation plans for each of the technology options to be introduced during the ten year period of the target will be released in the third quarter. The key elements are:

* development of market rules, which provides preferential access to the grid and customers for renewable energy power producers
* introduction of incentives to facilitate the development of viable business cases for the generators. We are in the process of developing a framework for the generation of power from sugar cane bagasse and landfill gas
* A roll out programme for solar water heaters has commenced, with the focus on middle to high income households in Gauteng, Western Cape and KwaZulu-Natal. This initiative is spearheaded by CEF.

I am pleased to announce that a positive record of decision for the Environmental Impact Analysis for the Darling Wind Farm was obtained. This has paved the way for the establishment of the IPP and construction of wind turbines.

Paraffin Safety

Madam Speaker the hazards associated with paraffin is a concern to the Department. The consequences of the accidents can be devastating on individual consumers and their families.

To address this, we have completed the new National Standard for Non-Pressure Paraffin stoves and Heaters and are currently awaiting final approval from the Standards Approval Committee at the South African National Standards. This is anticipated to be ready sometime next month. Phansi nge Primus Stove Phansi.

Supplier Development Agency

The charter has resulted in the transfer of over 18% equity to black hands. All oil companies have complied, with the exception of Sasol. We urge them to expedite all aspects of transformation. The industry has now shown further leadership by not only opening up their procurement but by also developing the suppliers. The oil industry has come together and contributed to the creation of the Supplier Development Agency (SASDA). I am proud to report that I launched the SASDA in Port Elizabeth in December 2004. Now only four months later SASDA is up and running and potential suppliers can now log into the database and view the opportunities for the supply of goods and services by simply logging onto http://www.sasda.co.za. The opportunities listed range from civil engineering, through supplying of valves to protective clothing.

Compliance with charters

Over the last eleven years Government has been emphasising the need for the management of South Africa mining companies to reflect the demographics of South Africa. This has been reinforced by the provision of the mining charter requiring that by 2009 senior management of these companies most have at least 40 % blacks at senior management level. Many companies pay lip service to these requirements.

We have expressed in public when companies faced with the opportunity to transform, fail to grasp this opportunity. Today we again express our exasperation and disappointment by De Beers’s announcement that it will replace one white male managing director with another white male managing director. This is the same company whose Board of Directors is lilly white and male dominated. No single black South African is in the Board.

I ask De Beers is this how you show commitment to transformation.

MINING

Rehabilitation

Approximately R120 million has been allocated over the 2005/06 to 2007/08 financial year, towards the rehabilitation of ownerless and derelict mines. The cleaning up of abandoned and ownerless asbestos dump sites was the department’s first rehabilitation priority. To date 65% of the identified 578 sites mainly in the Northern Cape and Limpopo have been cleaned up.

The rehabilitation programme for 2005/06 includes the following:

* R48 million has been allocated to asbestos rehabilitation, which continues to be a priority for our department, as it is a serious health hazard for our people. For this financial year, R13 million has been allocated to the rehabilitation of Osizweni/Madadeni in the Newcastle area, to the T&DB colliery at Witbank and the rehabilitation of Vierfontein Colliery near Viljoenskroon in the Free State.

* In North West, Northern Cape and Mpumalanga, the Council for Geoscience has identified about 490 of these abandoned shafts, which pose a severe safety risk to nearby communities. The recent reported incidents of the lady and a child who fell into these old shafts are a case in point that this matter must be implemented urgently. It was only by God’s grace that they were found alive and survived.

* R18 million has been allocated towards the rehabilitation of abandoned uranium mines in the Karoo and Free State.

* In total, tenders to the amount of R104 million will be put out as part of the rehabilitation programme in 2005/06. It should be mentioned that each of the rehabilitation projects will incorporate dedicated enterprise development and intensive job creation.

Water Ingress into the Mines of the Witwatersrand Basins

Within the KOSH area where DRD gold mines are in the process of being liquidated, legal proceedings against these mines and other adjacent mines like Harmony and AngloGold Ashanti are ongoing. However, the legal proceedings will not resolve the water problems. Due to DME’s mandate pertaining to social and labour issues, health and safety as well as environmental issues, which include water, the DME has investigated the implementation of medium to long term solutions where the water problem becomes an economic opportunity. These solutions are supported by all the relevant mining companies who have committed their support in working towards the implementation of these solutions.

NEW PARTNERSHIP FOR AFRICA'S DEVELOPMENT (NEPAD)

African Mining Partnership

In support of the implementation of mining-related NEPAD issues, the Department played an important role in conceptualising the African Mining Partnership, a mining Ministers’ partnership that drives the minerals and mining agenda of NEPAD. During this financial year, the Department will continue to participate in the implementation of projects on Beneficiation, Small Scale Mining, Environment/Sustainable Development, Human Resource Development and Promoting Foreign Investment and Indigenous/Local Participation.

PROGRESS ON SELECTED PROJECTS

Exclusive Economic Zone

A collaborative program amongst coastal states has been put in place under the auspices of the African Mining Partnership. The programme provides a platform for African coastal states to share expertise in the compilation of their respective submissions supporting their claims to extend their Exclusive Economic Zones. The submission to the United Nations should be done by May 2009. The project is led by the South African Council for Geoscience and Senegal.

The Council for Geoscience has purchased an aircraft equipped with airborne geophysical instrumentation. This instrumentation measures properties such as the earth’s magnetic field and the natural radio activity of the surface of the earth with the use of the magnetometers and spectrometers. These measurements assist in the identification of hidden geological structures dykes, faults, kimberlites as well as alluvium and polluted areas. This airborne system also has the potential of targeting unknown minerals deposits, source of ground water and environmental programmes. The launch of this airborne platform will be held on 23 May 2005 in Grand Central’s Hangar, Johannesburg.

The Western Power Corridor Project

The Intergovernmental Memorandum of Understanding on the Western Power Corridor Project (WESTCO) was signed in October 2004. WESTCO is a NEPAD flagship programme intended to pilot hydroelectric energy of the Inga rapids site in the Democratic Republic of the Congo (DRC) and will ensure security of supply in Southern African Development Community (SADC). The participating utilities are those of Namibia, South Africa, the DRC, Botswana and Angola. A joint venture company has been formed to initiate studies determining the viability of the project, to build, own, and operate the infrastructure.

African Petroleum Producers Association

PetroSA is increasingly active in African counties exploring and developing oil fields. Consequently I believe the time is now right for South Africa to apply for membership of the African Petroleum Producers Association. This will provide us with a forum for dialogue and cooperation on oil matters as well as strengthening the NEPAD programme.

Mine Health and Safety Inspectorate

We wish to pay the tribute to the late Dr Menzi Mthwecu, the former CEO of the Mining Qualifications Authority. He was a hard working, selfless cadre, leader, organiser, and educator and dedicated to bettering the lives of the poor. May his soul rest in peace.

During the year under review, we sadly experienced fatalities in the mines, an aspect we need to give enormous attention to. Our heartfelt condolences also go to those mineworkers who lost their lives in the line of duty.

During the year under review, we sadly experienced fatalities in the mines, an aspect we need to give enormous attention to. Mining related seismicity has in many cases been the course of these accidents.

The following are some of the interventions by the Department to address to ensure the improvement of health and safety in our mines:

* improving the placement and design of stabilizing pillars in new excavations
* developing and installing better roof and tunnel support systems e.g. backfill and long tendons
* monitoring seismicity to track trends over time. Education and training of engineers and workers in methods of reducing seismicity related risks
* sharing information at an international level on best practice and experience.

Intervention by the Department has lead to a significant reduction of occupational health hazards from the silicon smelters in Polokwane. A reduction of sulphur dioxide emissions from the Anglo Platinum Waterval smelter in Rustenburg was also realised through the Department’s intervention.

Ladies and Gentlemen, I can only end by quoting out President when he addressed the nation in February this year “our country as a united nation has never in its entire history enjoyed such as confluence of encouraging possibilities, acting together, sparing neither effort nor strength, we can and shall build a South Africa that true belong to all who leave in it, united in our destiny”.

I thank you.

Issued by: Department of Minerals and Energy
19 May 2005